Tell Us Why The CFTC Shouldn't Crack Down On Speculatorshttp://www.businessinsider.com/no-the-strategic-reserves-should-not-have-been-released-last-summer-2009-8/comments
en-usWed, 31 Dec 1969 19:00:00 -0500Tue, 31 Mar 2015 14:54:45 -0400Jay Yarowhttp://www.businessinsider.com/c/4ace463f00000000007d2c25CME TraderThu, 08 Oct 2009 16:06:23 -0400http://www.businessinsider.com/c/4ace463f00000000007d2c25
Well said!! This guy has no idea what he's talking about! I looked at his profile, he doesn't even trade stocks let alone futures. lolhttp://www.businessinsider.com/c/4ac6c2f002790a594a2c4443Milton FriedmanFri, 02 Oct 2009 23:20:16 -0400http://www.businessinsider.com/c/4ac6c2f002790a594a2c4443
Jay Yarow, how many contracts of any commodity have you traded over the course of your life? None? Why am i not shocked? Why doesn't your analysis complain that oil was "too cheap" at $33/barrel?
"Generally speaking, speculators have been net long since the middle of 2003" Are you retarded? A futures contract is double sided. For every one person who is long, someone else needs to be short. I know I ask a lot of questions and your tiny little brain probably can't comprehend all of the concepts of free market economics, but do your best and maybe you'll have an embolism and die, thus raising the average IQ of the entire world.http://www.businessinsider.com/c/4aa2be293dc30d204aec00f1ZapSat, 05 Sep 2009 15:38:17 -0400http://www.businessinsider.com/c/4aa2be293dc30d204aec00f1
If "speculators" are moving these markets why hasn't UNG risen?
http://www.isda.org/speeches/pdf/Onion-futures-Annex.pdfhttp://www.businessinsider.com/c/4a9f029c2b00c86e12d08a0bSean LynchWed, 02 Sep 2009 19:41:16 -0400http://www.businessinsider.com/c/4a9f029c2b00c86e12d08a0b
Nobody has the right to say whether someone who wants to buy something really needs that thing. You can't tell me I don't really *need* a second car and therefore I can't buy one, even if if that drives up the cost for other people. Likewise, you have no right to tell me I can't hold oil to hedge against inevitable energy price increases (which affect me as much as anyone else) just because I don't actually intend to burn that oil. Trying to regulate "speculators" is just a form of government-imposed rationing, plain and simple.
The chickens are coming home to roost with respect to the government's inflationary policies, so now the users of commodities are whining about the fact that the market is reflecting this in the prices they have to pay. Rationing can hide the symptoms of inflation, but only for so long. In the end, all this will do is allow the bubble-blowing to continue for a little bit longer while making sure the crash that DOES eventually come is that much bigger.http://www.businessinsider.com/c/4a9af153a2d56c28563b8b07DaYooperSun, 30 Aug 2009 17:38:27 -0400http://www.businessinsider.com/c/4a9af153a2d56c28563b8b07
If everyone that had a physical short (homeowner or car buyer) at least netted out the delta when they made the asset purchase, it would not matter if oil went to $1000/barrel. The problem isn't with speculation of "30 something" traders of financial products. If everyone that had a short position for the life of an asset managed their risk there wouldn't be any volatility for those "30 something" traders to make any money off of. One of the comical points that is lost in this argument is that this paper was written by two at the Baker Institute for Public Policy. The major source of funding for the Baker Institute is the Rice Endowment, and yes the Rice Endowment had financial long positions in energy commodities over the past 5 years (along with the endowment for Harvard, and pension funds like Calpers, Calsters, NY Pension and oh yeah long only ETFs...). This would not be a debate if the citizens of this country had not taken an enormous long term short position in oil (and other energy commodities) without putting on even a small hedge.http://www.businessinsider.com/c/4a9ae90b71ac311627279059PieFarmerSun, 30 Aug 2009 17:03:07 -0400http://www.businessinsider.com/c/4a9ae90b71ac311627279059
1. Regulation is a net negative in any market. We do it only to satisfy our false desires to eliminate negative outcomes or to satisfy the ego trips of politicians.
2. Where is the problem? The only true shortages in my lifetime were caused by government mandated price fixing in the 70s and natural disasters in 2007.
3. Look past the veil of money. We never, ever had a shortage until Nixon floated the dollar. With a stable dollar, there was no risk to carrying lots of inventory. With a floating dollar, producers get confused by the false signals in a floating price.
4. The market will punish speculators. If 50% of the players were speculating and were positioned LONG, then they got their due when oil crashed from $140 to $40.
http://www.businessinsider.com/c/4a998ce9175fc17f7200b574krypticSat, 29 Aug 2009 16:17:45 -0400http://www.businessinsider.com/c/4a998ce9175fc17f7200b574
Why not?
<b>$150 / barrel oil, $4 / gallon gasoline </b>
The issue is margin requirements. Require 50% margin and clamp down of speculation and the oil price situation will stabilize.
A reasonable level of speculation is healthy for a market and helps stabilize prices. High levels of speculations are unhealthy and cause price volatility.
http://www.businessinsider.com/c/4a9907292e4a9c1118f08a94Perry525Sat, 29 Aug 2009 06:47:05 -0400http://www.businessinsider.com/c/4a9907292e4a9c1118f08a94
You merely have to note how much money the banks have made speculating on the price of oil and the fact that many insurance companies and hedge funds have jumped in, to realise that they are there to make money, lots of money!
If they didn't make money they wouldn't do it!
The money they make is all added to the price we pay at the pump.
So why let them do it to us?
As tax payers should not the government protect us from these vultures?http://www.businessinsider.com/c/4a98884e5e84c8387f8f340bJimFri, 28 Aug 2009 21:45:50 -0400http://www.businessinsider.com/c/4a98884e5e84c8387f8f340b
I have no problem with speculaltion, gambling in the markets.
What would be more telling is what leverage these funds are employing.
http://www.businessinsider.com/c/4a98681cb9f78b1c12a801b8nameFri, 28 Aug 2009 19:28:28 -0400http://www.businessinsider.com/c/4a98681cb9f78b1c12a801b8
Will they also crack down on speculation on gold, silver, corn, wheat, natural gas, coal, copper, wood, ethanol? How about stocks? There is alot of speculation there too.http://www.businessinsider.com/c/4a9851dd74480f5046978edbyepFri, 28 Aug 2009 17:53:33 -0400http://www.businessinsider.com/c/4a9851dd74480f5046978edb
@ AGROSSPIECEOF HUMANITY - actually, the French were the ultimate speculators of their day funding our war against the British, which led them to collapse in 1789. The founding fathers were sick of British taxes with no rep. The money came from France and elsewhere.
I'd equate what's happening now to the lot of the propertyless American Rev soldiers who actually died during that war - all for no vote in the new government. The middle class is now being asked to ante up for generations to come to the rescue of the banks that brought the system crashing down. How about their/our "sacred honor." http://www.businessinsider.com/c/4a9847926f3d1e0975188cf5AGrossPieceofHumanityFri, 28 Aug 2009 17:09:37 -0400http://www.businessinsider.com/c/4a9847926f3d1e0975188cf5
Speculation is what made America great. Our founding fathers were the ultimate speculators of their day by speculating with their lives, their fortunes and their sacred honor on the success of a new republic.
Why should we be anything less?http://www.businessinsider.com/c/4a9844020667b26a51f83f36dfFri, 28 Aug 2009 16:54:26 -0400http://www.businessinsider.com/c/4a9844020667b26a51f83f36
who is net short?
the whole planethttp://www.businessinsider.com/c/4a9831cfbcb8b84856742c36DFri, 28 Aug 2009 15:36:46 -0400http://www.businessinsider.com/c/4a9831cfbcb8b84856742c36
If the oil speculators are net long, then who is net short? Speculation is supposed to be a zero sum game. However, if we can establish that a group of speculators made consistent profits in a market over a period of time, they aren't speculating - the market is broken.http://www.businessinsider.com/c/4a982dee944427192a5913eeBSWFri, 28 Aug 2009 15:20:13 -0400http://www.businessinsider.com/c/4a982dee944427192a5913ee
Henry Blodget - Supply and Demand equation. For what? The thousands of worthless paper barrels of oil floating around out there. When one barrel of oil gets traded 100 times before it is used should show there is an issue.
I don't actualy believe it is the speculators faults though. They are lemmings doing what they are told and grabbing up little pieces of meat that drop on the floor. There is something or someone else causing the problem. It could be investment banks buying up Oil and storing it in tankers with the TARP money the got and didn't want or traders and banks getting together selling oil back and forth 100 times then selling it to some desprate schmuck that actualy uses it while laughing all the way. How else can you explain oil goes up and oil imports drop for it to go back up. Then you have prices drop for whatever reason and we have more imports than expected. Not rocket science to see what is going on there. The market is being controled by who has the most money.
As for selling all the oil to the government in such a way that you speek screams of Communist views and that has no place here...regardless if you were being sarcastic.http://www.businessinsider.com/c/4a982cf51af57b0a08d633ebbrent is the problemFri, 28 Aug 2009 15:16:04 -0400http://www.businessinsider.com/c/4a982cf51af57b0a08d633eb
henry...go read the oil drum post by the ex-IPE director...in sum: everything is benchmarked against Brent. only a few milliion bbl of brent pumped per day...BP and GS have extensive info on pipeline data as well as ability to move clients/prop money to bid up the few million bbls. All told in only costs a few billion, considering half a trillion is in commodities, thats not hard to do.http://www.businessinsider.com/c/4a982a7df45c3754124178b8yepFri, 28 Aug 2009 15:05:32 -0400http://www.businessinsider.com/c/4a982a7df45c3754124178b8
Henry - http://www.washingtonpost.com/wp-dyn/content/article/2008/08/20/AR2008082003898.html
As someone who knows an ex-Morgan, ex-Vitol trader (left soon after this story was published) - I can tell you last summer was a speculative bubble. Would there still be price swings - of course - caused by suppliers (OPEC, Russia, etc) but these suppliers have a lot more skin in the game than said 30-something traders trying to pump up their bonus numbers for an early retirement. There would be far less radical price swings and the price of oil would represent true supply and demand.http://www.businessinsider.com/c/4a982823a519d70d7dfeaf51Henry BlodgetFri, 28 Aug 2009 14:55:31 -0400http://www.businessinsider.com/c/4a982823a519d70d7dfeaf51
No one has persuaded me that speculators caused the oil spike. If there's good evidence out there showing it, I'm happy to change my mind.
I understand the pain of an oil spike versus, say, a Cisco spike (which most people would enjoy), but there is just no way that removing speculation from the market will change prices over the long term. Over the long term, this is a supply/demand equation.
If the goal is absolute price control, why don't we just have the US government be the only legal buyer of US oil. All oil companies will sell to the government, and all refiners will buy from the government. The government can fix prices every quarter, so no one will be affected by changes.
Even then, you would have big, painful price moves--because every quarter, the government would adjust the price based on supply and demand. And when the world economy was cranking and China was sucking down oceans of oil, the price would go up--and the government would have to pass that through.
That said, if the desire is to return to the pre-Bush or pre-Clinton regulations, I'm probably fine with that. (I don't know the details). All I know is, even if you kicked every speculator out of the market tomorrow, you would still have huge price swings.http://www.businessinsider.com/c/4a98280a9e501a5e68c6f7b2Oil BratFri, 28 Aug 2009 14:55:06 -0400http://www.businessinsider.com/c/4a98280a9e501a5e68c6f7b2
Here's what I find curious. The whole concept of Peak Oil, which has been blogged about just this week, was never really batted around en mass until last summer when crude hit its high. So if oil has been artificially held up by non commercial speculators since this period around 2003 then would the peak oil camp still exist if oil had never reached that level?
In other words, would all of the fear arond running out of oil ever reared its head had we not seen $140 per barrell and the market just hung around $60 dollars? Assuming that level would reflect what people perceived as the proper supply/demand relationship + a premium for gulf war tension and the potential impact of a nasty hurricane season
Is this premise solely driven by price without a real definitive accounting for actual supply?http://www.businessinsider.com/c/4a982687e7a55e2439ee51ebyepFri, 28 Aug 2009 14:48:39 -0400http://www.businessinsider.com/c/4a982687e7a55e2439ee51eb
@stoploss - You probably also think bringing back regulation on oil speculation will lead to reeducation camps and mind control by the government....
http://www.businessinsider.com/c/4a9824b538a0377e52e3adb5StoplossFri, 28 Aug 2009 14:40:53 -0400http://www.businessinsider.com/c/4a9824b538a0377e52e3adb5
But it's "ok" for the "speculators", to drive up AIG over 300% in less than a month, not to mention FAN, FRE.. These three companies are WORTHLESS zombies...
So go ahead and jump in AIG, or you will miss out!! I'll bet you own AIG too dont you?
So lets regulate the "speculators" in everything, commodities, oil, financials, any thing and everything.. Also while we're at it, we should also regulate how many shares are allowed to be owned by any 1 person regardless of their stature.. All the way from Joe Investor to the elite on wall street.. " No one person or institution can own more than a hundred shares for any company at any time." The position shall not move more than 1% in a years time, also it shall not move down at all, resulting in a dead position that if you were crazy enough to hold for 30 years, will STILL be worthless..
Are you independently wealthy Jay? This regulation you write about, will also kill YOUR
retirement plans as well, you just dont realize it yet... So regulate everyone right out of the market and see what you get.. It'll be a zombie market, just like the gubment wants it.
The difference between your generation and mine is, your generation will be the first to work their entire lives with no hope of social security, or retirement, as it is known now.
So when your 75, and still working your butt off, think back to today right before we regulated ourselves into oblivion... I feel sorry for your generation, as there is zero foresight, into what is actually happening now, that directly affects you 30 years from now.http://www.businessinsider.com/c/4a9823eb5df9971874669dcahorace manoorFri, 28 Aug 2009 14:37:31 -0400http://www.businessinsider.com/c/4a9823eb5df9971874669dca
increased regulation will harm american interests
speculation doesn't originate with evildoers -- it originates with excessive printing of fiat money -- all those dollars have to go somewhere
nobody in washington wants americans to wake up to how much the printing of fiat money distorts market signals, so our glorified & beloved leaders distract us by pointing out suitable scapegoats to take the blame
american economists & financial journalists help washington by swallowing its propaganda & then spitting it out for the great unwashed to lap uphttp://www.businessinsider.com/c/4a9823c55148fa55574a827ayepFri, 28 Aug 2009 14:36:52 -0400http://www.businessinsider.com/c/4a9823c55148fa55574a827a
I'm sure Henry also supports the lower capital gains tax rate specifically for traders of commodities -
http://www.businessinsider.com/obamas-budget-hits-commodities-and-options-dealers-with-surprise-tax-hike-2009-5
Did the repeal of that rate ever pass by the way? What a freaking joke. http://www.businessinsider.com/c/4a9822f231f9a9205919c803yepFri, 28 Aug 2009 14:33:22 -0400http://www.businessinsider.com/c/4a9822f231f9a9205919c803
Henry - again you make no argument as to why we shouldn't return to pre-Clinton regulations. It's only helped speculators and traders - i.e., worthless leeches on the economy. Why do we need speculation in oil? Please explain why the world has been better the past ten years than it was before. Please also explain why oil traded at $145 a barrel last summer. And why should it be treated any differently than other commodities? Oil is a much more vital commodity to civilization (and the middle class) than silver, gold, platinum, etc. Of course, I also don't think banks should be buying up wheat and storing it in grain silos to jack up the price either - but so far they haven't sniffed that scheme out. As a commodity trader friend of mine in Chicago once said 'I'm nothing more than a thief.'http://www.businessinsider.com/c/4a9822db9f8571425f5b8b38RHTFri, 28 Aug 2009 14:32:59 -0400http://www.businessinsider.com/c/4a9822db9f8571425f5b8b38
Henry, although I realize it can be quite a slippery slope, but the oil market should be treated different than other markets (such as the stock market) because if the price of Cisco stock goes through the roof, it doesn't affect people in the way the price of a barrel of oil going to $200 would. Actually, that's pretty simple.http://www.businessinsider.com/c/4a98218496ea4a6c5c7d73ddrdFri, 28 Aug 2009 14:27:15 -0400http://www.businessinsider.com/c/4a98218496ea4a6c5c7d73dd
It is speculation when you buy it using money borrowed from somebody else. Otherwise, it is just investing and trading.
Their crackdown focus needs to be on how much borrowed money is in the markets, particularly money borrowed at the Fed discount window at effectively zero interest with a guarantee that your institution can't fail, now matter how stupid it is.
We have been told that the Fed is pursuing these loose credit policies to encourage lending to businesses and individuals for productive uses. however, it seems like a lot of the money has leaked onto trading floors for speculation. Has anybody been looking at that?http://www.businessinsider.com/c/4a981db0a279d45f1887afd8Henry BlodgetFri, 28 Aug 2009 14:10:56 -0400http://www.businessinsider.com/c/4a981db0a279d45f1887afd8
I certainly don't see the correlation in that chart that supposedly shows it (check out the volatility of the net open positions relative to the spike). Maybe if you advance or lag it a bit.
I think it comes down to exactly what the limitations and restrictions are going to be. Why should the oil market be any different from any other market--almost all of which allow speculation.